Hourly Rates on the Rise for Freelance Development Work

Although the U.S. labor report recently showed that joblessness is at its highest in years, rays of recovery are starting to peek through the storm clouds. Not only are job cuts slowing, according to a recent Bloomberg.com article, but also the hourly rates for freelance software development in the U.S. have risen by 35 percent during the past year.

“We [have] observed an increase in the U.S. software development rate [for freelance work] from $19.52 an hour to $26.29 an hour, and that was from the end of April ’08 to the end of April ’09,” said Gary Swart, CEO of oDesk, a global service for small and medium-sized businesses to hire, manage and pay remote freelancers.

Software development jobs on oDesk include the subareas of desktop applications, game development, mobile apps, application interface design and software project management.

“For good [software developers], it’s easier [to find work right now] because the demand is so high,” Swart said.

A few things will set great developers apart: a well-developed profile, higher test scores on sites such as oDesk.com, positive feedback from buyers and properly defined skill sets.

Not all countries are seeing increases in hourly rates, though. And Swart said that in countries that are experiencing growth — including the U.S., Pakistan and Russia — the work completed has proven to be higher quality than that in geographies with dips in hourly rates.

“For the U.S., we’re finding [that] if you look at the trends of increasing rates, you’ll see that it has a lot to do with the quality of the remote providers in the United States,” Swart said. “And so we see as people work, and as they build their reputation and their feedback, they’re able to increase the rates.”

On top of the increase in the hourly rate for software development work, Swart noted that there has been an increase in online freelance jobs in myriad areas, including quality assurance and project-based work, as well as in marketing, writing and documentation in general.

Swart attributed this growth in remote work to a number of coexisting circumstances.

“I think it’s a combination of the economy, and it’s also people recognizing that there’s a different way to work. And companies without the cost concerns, they still want to get access to a global talent pool. Why not expand your horizons beyond just your local geography?”

This availability for remote work has implications for both service providers and buyers of those services, Swart said.

“For the providers, it says that you can charge the wage you’re worth in the global economy,” he said. “And if you’re skilled at what you do, and you’re a quality provider, you’re going to be able to continually increase your wages due to the marketplace element. We’re seeing an increase worldwide for highly skilled software development talent, and customers aren’t afraid to pay for it.”

On the other side, remote work of this kind — through a platform such as oDesk — is a good opportunity for buyers, as well.

“Because [oDesk’s model is] so transparent, you as a buyer can make a good decision about what it’s going to cost you, and buyer value is determined by them, not [oDesk],” Swart said. “What we’re noticing is remote workers are widely accepted and embraced nowadays, and companies are interested in hiring remote employees because they can get more done for less. And clearly there’s talent from around the world that’s dying to work.”